Weekly Outlook Nifty for week (May 30, 2016 – June 03, 2016)
Nifty weekly performance (May 23, 2016 – May 27, 2016):
Indian stock markets ended the week on a negative note. The BSE Sensex was up by 5.34%, while the NSE Nifty was up by 5.25%.The tug-o-war finally ended in favour of the bulls. They snapped back in style and have thrown the bears out of the ring with a 400-point move. It seems like the index could now trade in a range of 8,000 and 8,200 and consolidate its gains before making an up-move.
Nifty Prediction for Week (May 30, 2016 – June 03, 2016):
Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 8250 to 8300 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 8600 to 8650 levels.
Broad range for the week is seen from 8000 on downside to 8300 on upside
Bank Nifty Prediction for Week (May 30, 2016 – June 03, 2016):
Support for the index lies in the zone of 17000 from where the index has broken out of the double top formation. If the index manages to close below these levels then the index can drift to the levels of 16500 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 18000 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 19000.
Range for the week is seen from 16600 to 16800 on downside to 18200 to 18400 on upside.
COMMODITIES : (Gold Touches Eight Week Lows )
Gold traded on a negative note during the week. It opened its session in the red on Monday. Prices fell after market participants cut their bets in gold after following a negative trend in the precious metals overseas. Losses were also seen midweek. Going forward, gold touched its lowest levels in eight weeks on Friday. This was seen as positive economic data in the US sparked expectations that the possibility of a US interest rate hike is on the table. The MCX Gold June contract opened the session at 29,677/10 grams. It traded at a low of 28,536/10 grams before finally closing the session at 28,603/10 grams.
Weekly News and Highlights:
1) Data released during the week stated that the US economy is gaining steam. Gross Domestic Product (GDP) expanded at a 0.8% seasonally adjusted annual rate in the first three months of 2016. This was recorded higher than the estimates of a 0.5% growth rate.
On an annual basis, GDP grew 2% in the first quarter of FY17. Consumer spending expanded at a 1.9% pace in the first quarter. Further, economic activity in the US expanded at a 1.4% pace during the fourth quarter of 2015. The Commerce Department stated that gross domestic income expanded at 2.2% in the first quarter against a 1.9% expansion recorded in the fourth quarter.
The robust data bolstered the likelihood of a near-term interest rate hike from the Federal Reserve. Investors are now awaiting the outcome of Fed minutes that will give further cues on this matter. The minutes released during the last week from a Federal Reserve meeting in April hinted that US interest rate hike is still in play.
The Fed is now going to meet a week before the UK EU referendum that is scheduled on June 23rd. The Brexit (British exit) campaign began in the United Kingdom when Prime Minister David Cameron received assistance for his call for the UK to remain in the European Union (EU).
Market participants are gauging that the Fed may even delay a decision on rates for fear of unsettling global markets as a possible Brexit looms.
2) During the week, a declaration at the G7 meeting in Japan opined that a vote by the UK to leave the European Union would pose a serious threat to global growth. The final communique by group set global growth as a priority for dealing with threats to the world's economy and security.
Japan’s exports fell 10% while imports plunged 23% in April. Also, a monthly survey of factory managers showed the sharpest deterioration in operating conditions in over three years. The data undermined Prime Minister Shinzo Abe's policies to spur inflation and growth in the world's third-largest economy.
3)Moving on to the news from crude oil. Reports stated US crude stocks dropped by 5.1 million barrels to 536.8 million during the last week. The commodity witnessed buying interest after the announcement and touched US$50 per barrel mark this week. The surge was followed by gains seen during the last week when crude oil rose to fresh 2016 highs. Marketmen are now eyeing next week’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna where a deal on capping production is to be discussed.
India:
4) During the week State Bank of India (SBI) reported its results for the quarter ended March 2016. The net profits declined by 66% YoY to Rs 12.6 billion during the quarter. The decline was mainly because of higher provisioning on account of bad loans.
The gross non-performing assets (NPAs) increased to 6.5%, higher than 5.1% as reported in the preceding quarter. As an absolute number the gross NPAs increased by 35% to Rs 981.7 billion on a sequential basis.
SBI's earnings have been hit in the March 2016 quarter on account of the clean-up exercise undertaken in line with RBI's Asset Quality Review (AQR).
Indian stock markets ended the week on a negative note. The BSE Sensex was up by 5.34%, while the NSE Nifty was up by 5.25%.The tug-o-war finally ended in favour of the bulls. They snapped back in style and have thrown the bears out of the ring with a 400-point move. It seems like the index could now trade in a range of 8,000 and 8,200 and consolidate its gains before making an up-move.
Nifty Prediction for Week (May 30, 2016 – June 03, 2016):
Support for the index lies in the zone of 8000 from where the index has broken out from the triple top formation. If the index manages to close below these levels then the index can drift to the levels of 7800 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 8250 to 8300 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 8600 to 8650 levels.
Broad range for the week is seen from 8000 on downside to 8300 on upside
Bank Nifty Prediction for Week (May 30, 2016 – June 03, 2016):
Support for the index lies in the zone of 17000 from where the index has broken out of the double top formation. If the index manages to close below these levels then the index can drift to the levels of 16500 where 200 Daily SMA is lying.
Resistance for the index lies in the zone of 18000 from where the index has sold off in the month of Oct – 2015. If the index manages to close above these levels then the index can move to the levels of 19000.
Range for the week is seen from 16600 to 16800 on downside to 18200 to 18400 on upside.
COMMODITIES : (Gold Touches Eight Week Lows )
Gold traded on a negative note during the week. It opened its session in the red on Monday. Prices fell after market participants cut their bets in gold after following a negative trend in the precious metals overseas. Losses were also seen midweek. Going forward, gold touched its lowest levels in eight weeks on Friday. This was seen as positive economic data in the US sparked expectations that the possibility of a US interest rate hike is on the table. The MCX Gold June contract opened the session at 29,677/10 grams. It traded at a low of 28,536/10 grams before finally closing the session at 28,603/10 grams.
Weekly News and Highlights:
1) Data released during the week stated that the US economy is gaining steam. Gross Domestic Product (GDP) expanded at a 0.8% seasonally adjusted annual rate in the first three months of 2016. This was recorded higher than the estimates of a 0.5% growth rate.
On an annual basis, GDP grew 2% in the first quarter of FY17. Consumer spending expanded at a 1.9% pace in the first quarter. Further, economic activity in the US expanded at a 1.4% pace during the fourth quarter of 2015. The Commerce Department stated that gross domestic income expanded at 2.2% in the first quarter against a 1.9% expansion recorded in the fourth quarter.
The robust data bolstered the likelihood of a near-term interest rate hike from the Federal Reserve. Investors are now awaiting the outcome of Fed minutes that will give further cues on this matter. The minutes released during the last week from a Federal Reserve meeting in April hinted that US interest rate hike is still in play.
The Fed is now going to meet a week before the UK EU referendum that is scheduled on June 23rd. The Brexit (British exit) campaign began in the United Kingdom when Prime Minister David Cameron received assistance for his call for the UK to remain in the European Union (EU).
Market participants are gauging that the Fed may even delay a decision on rates for fear of unsettling global markets as a possible Brexit looms.
2) During the week, a declaration at the G7 meeting in Japan opined that a vote by the UK to leave the European Union would pose a serious threat to global growth. The final communique by group set global growth as a priority for dealing with threats to the world's economy and security.
Japan’s exports fell 10% while imports plunged 23% in April. Also, a monthly survey of factory managers showed the sharpest deterioration in operating conditions in over three years. The data undermined Prime Minister Shinzo Abe's policies to spur inflation and growth in the world's third-largest economy.
3)Moving on to the news from crude oil. Reports stated US crude stocks dropped by 5.1 million barrels to 536.8 million during the last week. The commodity witnessed buying interest after the announcement and touched US$50 per barrel mark this week. The surge was followed by gains seen during the last week when crude oil rose to fresh 2016 highs. Marketmen are now eyeing next week’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna where a deal on capping production is to be discussed.
India:
4) During the week State Bank of India (SBI) reported its results for the quarter ended March 2016. The net profits declined by 66% YoY to Rs 12.6 billion during the quarter. The decline was mainly because of higher provisioning on account of bad loans.
The gross non-performing assets (NPAs) increased to 6.5%, higher than 5.1% as reported in the preceding quarter. As an absolute number the gross NPAs increased by 35% to Rs 981.7 billion on a sequential basis.
SBI's earnings have been hit in the March 2016 quarter on account of the clean-up exercise undertaken in line with RBI's Asset Quality Review (AQR).
Comments